The Ministry has attributed the boom to the nod it gave to independent investment and management of power projects a year and a half ago and Vietnam's large potential for hydro power production. It said a feasibility study for a small and medium hydro-power project costs an investor just US$63,111 and a period between six and 12 months. Ground-clearing efforts have also proved much simpler than those related to industrial parks, and affordable by a large number of businesses.
An investor in a hydro power plant has to invest just 2 cents to generate 1kWh of electricity but earns 5 cents for it. A business therefore may retrieve its initial investment in eight years, a recent survey showed.
The survey showed that production in the years to come still remains short to meet national demand for power which calls for an additional 1000MW a year. Therefore, all hydro plants have a guaranteed market for the electricity they produce with Electricity of Viet Nam, the sole power distributor in the country.
A small hydro project with an annual capacity of between 10 and 20MW can sign a contract for 25 years.
